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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
Coca-Cola Enterprises Inc has a M-score of -2.46 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Coca-Cola Enterprises Inc was -0.74. The lowest was -4.75. And the median was -2.56.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Coca-Cola Enterprises Inc for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 1.0762||+||0.528 * 1.0234||+||0.404 * 0.9934||+||0.892 * 1.0234||+||0.115 * 1.1066|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9193||+||4.679 * -0.0165||-||0.327 * 1.083|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $1,793 Mil.|
Revenue was 1870 + 2032 + 2174 + 2156 = $8,232 Mil.
Gross Profit was 650 + 688 + 787 + 753 = $2,878 Mil.
Total Current Assets was $2,770 Mil.
Total Assets was $9,691 Mil.
Property, Plant and Equipment(Net PPE) was $2,324 Mil.
Depreciation, Depletion and Amortization(DDA) was $305 Mil.
Selling, General & Admin. Expense(SGA) was $1,891 Mil.
Total Current Liabilities was $2,564 Mil.
Long-Term Debt was $3,730 Mil.
Net Income was 115 + 135 + 289 + 182 = $721 Mil.
Non Operating Income was -1 + -3 + 1 + -2 = $-5 Mil.
Cash Flow from Operations was 67 + 236 + 450 + 133 = $886 Mil.
|Accounts Receivable was $1,628 Mil.
Revenue was 1850 + 1916 + 2070 + 2208 = $8,044 Mil.
Gross Profit was 634 + 662 + 775 + 807 = $2,878 Mil.
Total Current Assets was $2,437 Mil.
Total Assets was $8,913 Mil.
Property, Plant and Equipment(Net PPE) was $2,220 Mil.
Depreciation, Depletion and Amortization(DDA) was $327 Mil.
Selling, General & Admin. Expense(SGA) was $2,010 Mil.
Total Current Liabilities was $2,540 Mil.
Long-Term Debt was $2,805 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1793 / 8232)||/||(1628 / 8044)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(688 / 8044)||/||(650 / 8232)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2770 + 2324) / 9691)||/||(1 - (2437 + 2220) / 8913)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(327 / (327 + 2220))||/||(305 / (305 + 2324))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(1891 / 8232)||/||(2010 / 8044)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((3730 + 2564) / 9691)||/||((2805 + 2540) / 8913)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(721 - -5||-||886)||/||9691|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Coca-Cola Enterprises Inc has a M-score of -2.46 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Coca-Cola Enterprises Inc Annual Data
Coca-Cola Enterprises Inc Quarterly Data